Motivation Theory to Maintain Motivation Levels among the Workforce in Cadbury - Coursework Example

? In light of the recent takeover of Cadbury, discuss how the management can use motivation theory to maintain/increase motivation levels among the existing workforce Table of contents 1. Introduction 3 2. Cadbury background – the takeover by Kraft 3 3. The effects of the takeover on employee motivation 3 4. Motivation theory 5 4.1 Maslow Hierarchy of Needs Theory 5 4.2 Herzberg theory 6 5. Management techniques for dealing with change 6 6. Conclusion 7 References 8 1. Introduction The potential use of motivation theory for improving employee performance in Cadbury is discussed in this paper. Employee motivation in Cadbury seems to be rather low, a fact that it is related to the firm’s takeover by Kraft in 2010. Two quite popular motivation theories, the Maslow Hierarchy of Needs theory and the Two Factors theory of Herzberg are used as the basis for developing a plan for enforcing employee motivation in Cadbury. The implications caused by the attempted change in Cadbury can be faced by managers using certain techniques, as suggested below. 2. Cadbury background – the takeover by Kraft Cadbury is considered as one of the most powerful competitors in UK food industry. The firm was established in 1824 as a family business (Cadbury, The Story). In 2010 the takeover of Cadbury by Craft resulted to the incorporation of Cadbury in Kraft Foods Inc (Cadbury, The Story). The beginning of the above takeover can be traced in August 2009 (Telegraph 2011). Cadbury tried to avoid the takeover, but without any success (Wearden 2010). On the 19th of January 2010 Cadbury accepted the improved bid of Kraft (BBC News 2010). Kraft acquired Cadbury at the price of ?11.5bn (Telegraph 2011). 3. The effects of the takeover on employee motivation The takeover of Cadbury by Kraft was believed as the only solution for increasing the productivity and sales of Cadbury. However, the above target has not been achieved. In fact, a decrease in productivity and profits of Cadbury has been reported from 2010 up today. This fact has been related to the decrease of employee motivation in Cadbury, as a result of Kraft’s inappropriate strategies for managing HR in Cadbury after the latter’s incorporation in Kraft. For example, within just one week after the signing of the takeover Kraft closed a major unit of Cadbury in Somerset, even if during the negotiations for the signing of the takeover process Kraft’s top managers had assured employees in Cadbury that no unit of the company would be closed after the completion of the takeover process; this initiative resulted to the dismissal of 400 workers of Cadbury (Steiner 2010). Within a few months, by July 2010, about 120 top executives of Cadbury’s had left Kraft stating their concerns on Kraft’s policies on Cadbury (BBC News 2010). Shortly after the completion of the takeover process, the workers of Cadbury organized a series of protests for showing their opposition to the takeover agreement (Morris 2010). This fact reveals that no plan for informing employees on the takeover process existed. In addition, the closure of Cadbury’s unit in Somerset led to accusations against Kraft ‘for misleading workers in regard to the safety of their positions’ (Steiner 2010). In the years that followed the management of HR issues in Cadbury by Kraft has resulted to strong oppositions in UK Parliament in regard to the level at which employees in UK companies are protected in takeovers of these companies by foreigners (CIMA 2013). Indeed, the strong protests and the dismissals in Cadbury as a result of its takeover by Kraft has resulted to the significant decrease of employee motivation in Cadbury; this problem has been expressed as both a decrease in the employees morale and as a decrease in productivity of employees, as noted earlier. The decrease of employee performance in Cadbury can be derived by the limitation of Kraft’s profits, due to the increase of Cadbury’s costs (BBC News 2011) and announcement of Kraft’s top managers that the forecasts related to the profitability of Kraft would be reviewed due to the falling profits of Cadbury (UK News 2011). The use of a motivation theory for enforcing employee motivation in Cadbury is, therefore, considered as critical. 4. Motivation theory 4.1 Maslow Hierarchy of Needs Theory Maslow noted that the needs of individuals can be divided into five categories, starting from the basic needs, i.e. the needs for survival, up to advanced needs, i.e. the needs for self-actualization (Montana and Charnov 2008). In the context of the above theory motivation can be resulted only as an individual tries to satisfy his unsatisfied needs (Montana and Charnov 2008). The five levels of human needs, as defined by Maslow, are presented in Figure 1 (Appendix). The theory of Maslow leads to the assumption that it is not possible for individuals to seek for covering the needs at the upper level of the hierarchy (self-actualization needs) if their physiological needs, at the lowest level of the hierarchy are not covered (Gitman and McDaniel 2008). The theory of Maslow could be used in Cadbury for promoting employee motivation in the following way: the positions of employees across Cadbury’s units should be first secured, so that their basic needs are covered. Then measures for controlling the increased costs could be introduced but without firing staff. For example, compensation could be slightly decreased but employee morale would be enforced by emphasizing on employee participation in the decision making process at unit level. In other words, emphasis should be given on the employees’ role as members of the organization and not on the provision of fair monetary rewards for employees’ performance. 4.2 Herzberg theory The Herzberg Two Factors theory of employee motivation (Figure 2, Appendix) is based on a similar view, as that of Maslow. Herzberg supported that the factors affecting employee performance can be divided into two categories: motivation factors and hygiene factors (Pride, Hughes and Kapoor 2009). These two factors are not equally powerful in influencing employee motivation (Pride, Hughes and Kapoor 2009). In fact, only motivation factors, also known as satisfiers, related to issues such as ‘recognition and responsibility’ (Pride, Hughes and Kapoor 2009, p.266) can increase employee motivation. The hygiene factors, also known as dissatisfiers such as ‘the work conditions or the salary’ (Kreitner 2008, p.338) do not necessarily lead to the increase of employee motivation even if the employer ensures that the needs of employees in regard to these factors are fully covered. In Cadbury, the theory of Herzberg should be used for increasing employee motivation in the following way: emphasis should be given not on the working conditions of employees, or on their salary, but rather on their chances for professional development as members of the organization. Such plan would be aligned with the suggestions made using the Maslow’s theory where the position of employees in the firm was set as of primary importance and not the level of employee compensation. 5. Management techniques for dealing with change One of the key challenges that managers in Cadbury have to face since the firm’s takeover by Kraft is the effective management of change. In the case of Cadbury change refers mostly to the role of Cadbury’s staff in Kraft. Indeed, since the takeover of their firm by Kraft, employees in Cadbury had not been given the chance to participate in the decision making process. According to Simms (2005) one of the key requirements for managing change is ‘the understanding of human behaviour at work’ (Mullins 1999, in Simms 2005, p.5). Of critical importance in managing change is to identify ‘a managerial behaviour that emphasizes on employee participation in the decision making process’ (Mullins 1999, in Simms 2005, p.5). Quality Circles would be a possible technique available to the managers of Cadbury for managing change. Quality Circles is a technique based on the creation of a group of individuals, i.e. employees in the case of Cadbury, who participate in meetings held regularly and who discuss on a series of issues related to their unit, such as employees’ performance, conflicts in the workplace (Mullins 2007, p.346). These individuals can also suggest solutions for addressing these issues, taking into considerations the resources available and the organizational goals (Mullins 2007, p.346). Quality circles is a technique quite popular worldwide for managing change that has been unavoidable because of alterations in a firm’s structure, culture or goals (Mullins 2007). 6. Conclusion The takeover of Cadbury by Kraft had resulted to important conflicts in the former’s workplace. The reason is that Kraft’s top management team had not developed a plan for managing change related to the particular agreement. Extensive redundancies even within a week from the takeover’s completion were not avoided. Maslow’s and Herzberg motivation theories could help to enforce employee motivation in Cadbury while the use of strategic tools, such as the Quality Circles, could support the effective management of change in Cadbury. In this way, employee satisfaction in Cadbury could be increased, a fact that would enhance the company’s productivity. References BBC News (2011) Kraft Foods’ profits hit by Cadbury costs. February 11, 2011. Available at http://www.bbc.co.uk/news/business-12427830 BBC News (2010) Cadbury agrees Kraft takeover bid. January 19, 2010. Available at http://news.bbc.co.uk/2/hi/8467007.stm BBC News (2010) Senior staff quit Cadbury after Kraft takeover. BBC News. July 28, 2010. Available at http://www.bbc.co.uk/news/uk-england-birmingham-10789983 CIMA (2013) The legacy of Kraft’s takeover of Cadbury. January 23, 2013. Available at http://www.fm-magazine.com/feature/depth/legacy-kraft%E2%80%99s-takeover-cadbury Gitman, L. and McDaniel, C. (2008) The Future of Business: The Essentials. Belmont: Cengage Learning. Kreitner, R. (2008) Management. Belmont: Cengage Learning. Montana, P. and Charnov, B. (2008) Management. New York: Barron's Educational Series Morris, S. (2010) Cadbury workers protest against takeover. The Guardian. January 27, 2010. Available at http://www.guardian.co.uk/business/2010/jan/27/cadbury-workers-takeover-protest Mullins, L. (2007). Management and Organisational Behaviour. Essex: Pearson Education. Pride, W., Hughes, R. and Kapoor, J. (2009) Foundations of Business. Belmont: Cengage Learning. Simms, H. (2005) Organisational Behaviour and Change Management. Beaconsfield: Select Knowledge Limited Steiner, R. (2010) 400 Cadbury's workers sacked after Kraft confirms factory will close just ONE WEEK after U.S. firm promised to keep it open. Mail Online. February 10, 2010. Available at http://www.dailymail.co.uk/news/article-1249728/Cadbury-sacks-400-workers-Kraft-breaks-promise-shut-factory.html The Telegraph (2011) Cadbury-Kraft takeover timeline. May 24, 2011. Available at http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8531023/Cadbury-Kraft-takeover-timeline.html UK News (2011) Cadbury's owner Kraft lowers forecasts due to falling profits. February 2011. Available at http://www.newsrt.co.uk/news/cadbury-s-owner-kraft-lowers-forecasts-due-to-falling-profits-51118.html Wearden, G. (2010). Timeline: Cadbury's fight against Kraft. The Guardian. January 19, 2010. Available at http://www.guardian.co.uk/business/2010/jan/19/cadbury-kraft-takeover-timeline Appendix Figure 1 – Maslow – Hierarchy of Needs theory (source: http://www.simplypsychology.org/maslow.html) Figure 2 – Herzberg – Two Factors theory (source: http://www.intelipad.co.uk/2012/01/24/herzbergs-and-maslows-impact-on-management-what-is-yours/) Read More